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Celgene (CELG) Gains But Lags Market: What You Should Know

Zacks Equity Research
Sonic Automotive (SAH) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Celgene (CELG) closed the most recent trading day at $93.67, moving +0.27% from the previous trading session. This change lagged the S&P 500's 0.88% gain on the day. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, added 1.32%.

Prior to today's trading, shares of the biotechnology company had gained 6.26% over the past month. This has outpaced the Medical sector's loss of 6.83% and the S&P 500's gain of 3.96% in that time.

CELG will be looking to display strength as it nears its next earnings release. In that report, analysts expect CELG to post earnings of $2.49 per share. This would mark year-over-year growth of 21.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.01 billion, up 13.33% from the year-ago period.

CELG's full-year Zacks Consensus Estimates are calling for earnings of $10.71 per share and revenue of $17.15 billion. These results would represent year-over-year changes of +20.74% and +12.24%, respectively.

Any recent changes to analyst estimates for CELG should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.1% higher. CELG is currently a Zacks Rank #3 (Hold).

Digging into valuation, CELG currently has a Forward P/E ratio of 8.72. Its industry sports an average Forward P/E of 20.42, so we one might conclude that CELG is trading at a discount comparatively.

Meanwhile, CELG's PEG ratio is currently 0.4. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CELG in the coming trading sessions, be sure to utilize Zacks.com.


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